Technology stocks support European stocks with focus on Fed meeting

The chart of the German stock price index DAX is depicted on the stock exchange in Frankfurt, Germany, December 13, 2021. REUTERS/Staff

Dec. 15 (Reuters) – European stocks rose Wednesday, helped by stronger technology and health stocks, but weakness in the retail and energy sectors capped gains ahead of a Federal Reserve policy announcement.

The pan-European STOXX 600 (.STOXX) closed 0.3% higher to end a five-session losing streak. Technology stocks (.SX8P) rose 1.3% after a recent selloff, while health stocks (.SXDP) rose 1.1%

A disappointing earnings update from Zara owner Inditex (ITX.MC) weighed on retail stocks (.SXRP) and, along with lower oil inventories (.SXEP), capped broader gains.

Crude oil prices fell for the third session due to mounting demand risks from the spread of the Omicron variant of the coronavirus. read more

Investors have been cautious in anticipation of the Federal Reserve’s monetary policy decision, which is due to take place at 1900 GMT, as the central bank is expected to hint at slowing down its bond purchases.

“We don’t expect to see a major cycle of gains next year as inflation peaks, which should give the Fed more time to act and see the ramifications before they get too aggressive,” said Jeremy Gatto, a senior executive. multi-asset portfolio. manager at Union.

“With Omicron’s uncertainty and central bank assemblies, it’s going to mean even more jerkiness in the coming weeks.”

The STOXX 600 is up about 1.7% so far in December, in what is typically a strong month for global equity markets.

London’s FTSE 100 fell 0.7%, a sixth consecutive decline and the worst losing streak since the pandemic struck in March 2020, on weakness in retail (.FTNMX404010), oil (.FTNMX601010) and travel stocks (.FTNMX405010).

Data showed that UK consumer price inflation rose to a more than 10-year high of 5.1% year-on-year in November ahead of the Bank of England meeting on Thursday. read more

The European Central Bank will also meet on Thursday, with policymakers expected to decide how to adjust the bank’s regular asset purchase program (APP) once the much larger pandemic PEPP settlement expires in March. read more

Swedish H&M (HMb.ST) fell 2.8% after the company’s quarterly sales met expectations, but analysts called sales in China a concern. Sales at Inditex and H&M are back to pre-pandemic levels or better. read more

Support services provider DCC (DCC.L) rose 9.0% after announcing its acquisition of Almo Corp. for approximately $610 million.

Shares of IAG (ICAG.L) fell 5.1% after British Airways’ parent company said it was in advanced talks to cancel its purchase of rival Air Europa from Spain’s Globalia. read more

Swedish bank SEB (SEBa.ST) fell 2.2% when it was hit by a tax claim of 511 million euros ($575 million) from Germany. read more

($1 = 0.8872 euros)

Reporting by Anisha Sircar in Bengaluru; Editing by Kirsten Donovan

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